RBI Reduced Remittance limit from USD 200,000 to USD 75,000

Today RBI had announced in its circular that forex Remittance limit for Residential individuals has been reduced from USD 200,000 to USD 75,000 per financial year with immediate effect.

INDIA-ECONOMY-RBI

Key notes from the RBI Circulars

1)Liberealised Remittance Scheme should not be used for making remittances for any prohibited or illegal activities such as margin trading, lottery etc

2)The scheme should no longer be used for acquisition of Real Estate, directly or indirectly, outside India. Therefore, AD Category-I banks may henceforth not allow any remittances under the LRS Scheme for acquisition of immovable property outside India.

3)Resident individuals have now been allowed to set up Joint Ventures (JV) / Wholly Owned Subsidiaries (WOS) outside India for bonafide business activities outside India within the limit of USD 75,000 with effect from August 5, 2013 and subject to the terms and conditions stipulated in Notification No.FEMA 263/RB-2013 dated August 5, 2013.

The RBI press release said that “this reduced limit would also apply to remittances made under the ODI (overseas direct investment) scheme by Indian companies for setting up unincorporated entities outside India in the energy and natural resources sectors. This reduction in limit, however, would not apply to ODI by Navratna PSUs, ONGC Videsh Ltd and Oil India in overseas unincorporated entities and incorporated entities, in the oil sector.”

While the measures are aimed at moderating outflows, the RBI added that genuine requirement beyond these limits will continue to be considered under the approval route
Reference to RBI Circular

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7 comments… add one

  • madan ojha August 14, 2013, 8:49 pm

    how our markets will react on this news?

    Reply
  • Rajandran R August 15, 2013, 1:24 pm

    No much impact. However this will put a cap on indian forex traders who remit payment to international forex brokers and such illegal forextrading activity will be controlled to some extend. And also the companies/individuals who are looking for investing in real estate would be affected as it is banned now.

    Reply
  • krish August 16, 2013, 1:11 pm

    As an individual, How much NSE – USDINR LOTS one can invest in Nse usdinr currency marginal trading?

    Regards,
    Krish

    Reply
  • Sam September 23, 2013, 4:03 pm

    how rule differs place to place
    ———————————————————————-
    Welcome to “Overseas Trading”

    Rationale of overseas trading facility offered by ICICIdirect

    Under Liberalized Remittance Scheme of Reserve Bank of India, Resident Individuals are allowed to remit up to USD 2,00,000 in a financial year (April to March) for any current or capital account transaction or combination of both. Under this scheme ICICIdirect has facilitated its customers to invest in various Stocks and Options that are traded on the exchanges in United States of America.

    Customers of ICICIdirect are eligible for this service

    All resident individuals are eligible to avail this facility. This facility is currently not available to corporate, partnership firms, HUF, Trusts, and NRIs etc.

    Products offered under overseas trading facility

    Equities
    Exchange Traded Funds
    Stock Options

    Reply
    • Rajandran R September 23, 2013, 4:33 pm

      @Sam : Probably i guess ICICI direct is not offering margin trading. And this kind of overseas trading requires huge deposit.

      Reply
  • drashajagtap November 10, 2013, 11:46 am

    i want aplication form form for foreign currency remittances ,on which sight i can get this application,i have draft in sterling pounds which can be deposited with rbi for transfer in local branchwhere i have account

    Reply
  • drashajagtap November 10, 2013, 11:50 am

    KINDLY TELLME PROCEDURE HOW TO DEPOSIT DEMANDDRFT IN BRITISH STERLING POUNDS IN MY LOCAL BRANCHACCOUNT OR SHOULD I SUBMIT WITHRESERVEBANK OF INDIA ,KINDLY EXPLIAN

    Reply

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    • Rajandran is a Market Analyst and founder of Marketcalls, one of the most intelligent blog in the world to share knowledge on Technical Analysis, Trading systems & Trading strategies.